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Panic-Buying Could Leave 90% Of UK Gas Stations Dry; BoJo Considers Calling In Army To Resupply

Panic-Buying Could Leave 90% Of UK Gas Stations Dry; BoJo Considers Calling In Army To Resupply

UK politicians panic as similarities to the 1970s-style “winter of discontent” of shortages and socio-economic distress have already materialized. Prime Minister Boris Johnson requested the Army to begin fuel deliveries to petrol stations.

According to Reuters, 90% of petrol stations could run dry across major metro areas on Monday after buying panic accelerated the crisis of low fuel supplies due to a shortage of truck drivers.

The buying panic began shortly after BP plc, a multinational oil and gas company, warned last Thursday that a shortage of truck drivers is inhibiting the oil company’s ability to transport fuel from refineries to its network of service stations. By Saturday, lines of cars spilled over into the streets at petrol stations and continued into the new week. The shortage has been made worse because of hoarding.

The Petrol Retailers Association (PRA), which oversees about 5,500 independent petrol stations, said about two-thirds had run dry by Sunday night, and the Reuters figure is 90% by Monday.

PRA chairman, Brian Madderson, said hoarding had worsened the crisis as it may take weeks to restock fuel supplies in the country. He said the government’s plan to increase heavy goods vehicle (HGV) drivers would not be a quick fix.

Speaking with BBC Radio 4’s The World This Weekend, Madderson warned:

“I’ve talked to a lot of our members… They serve the main roads, the rural areas, the urban roads, and anywhere in between 50% and 90% of their forecourts are currently dry, and those that aren’t dry are partly dry and running out soon.”

In a move to boost HGV drivers, the government is considering calling the military to transport fuel to petrol stations. The country needs at least 5,000 more HGV drivers after it lost drivers post-Brexit and after the COVID-19 pandemic, which adds even more woes not just to the fuel supply chain network but has also disrupted food supplies at supermarkets.

…click on the above link to read the rest of the article…

UK’s Fertilizer Crisis Spreads To EU After Another Firm Slashes Output

UK’s Fertilizer Crisis Spreads To EU After Another Firm Slashes Output

Europe’s energy crisis has claimed another victim, with Austrian fertilizer producer Borealis AG slashing the output of ammonia after the cost of the primary feedstock, natural gas, compresses margins in an industry already facing tight supplies, according to Bloomberg.

Borealis’ ammonia-producing plant uses natural gas to make fertilizer. The high cost of natgas makes fertilizer uneconomical to make. This is yet another sign of deepening woes for the industry after the UK government said it would provide “limited financial support” to help CF Industries restart one of its fertilizer plants this week.

The culprit behind surging natgas prices has been declining flows into Europe via Russia, though there are signs natgas shipments could increase in November. But that won’t alleviate high prices because stocks on the continent are well below average ahead of the winter season, indicating Europe’s energy crisis may drag on for months.

Disruptions of ammonia supply and other fertilizers have had a significant impact on the production of carbon dioxide supply in the UK, sending the industry into a tizzy and rippling through food supply chains, such as slaughterhouses to packaging to carbonated drinks to dry ice production.

Commodity analysts at CRU Group said half the continent’s ammonia capacity could be at risk due to dwindling production because of elevated natgas prices. Spot prices  of ammonia per ton in Western Europe have surged from around $225 per ton at the beginning of the virus pandemic to $700 per ton this month.

Borealis’ reduction in ammonia production is a sign the fertilizer crisis continues to ripple across the continent. The company said Thursday it would analyze the situation” regarding its plants in Austria, France, and the Netherlands – not much detail was given.

…click on the above link to read the rest of the article…

Soaring energy prices in Europe are forcing U.K. factories to shut down

Soaring energy prices in Europe are forcing U.K. factories to shut down

Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day

Europe’s energy crunch has forced a major fertilizer maker to shut down two U.K. plants, the first sign that a record rally in gas and power prices is threatening to slow the region’s economic recovery.
CF Industries Holdings Inc. said Wednesday it’s halting operations at its Billingham and Ince manufacturing complexes due to high natural gas prices, with no estimate for when production will resume. European gas and power futures tumbled Thursday on signs energy-intensive industries are curbing consumption.The move comes as Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day. The continent is running out of time to refill storage facilities before the start of the winter as flows from top suppliers Russia and Norway remain limited. There’s also a fight for shipments of liquefied natural gas, with Asia buying up cargoes to meet its own demand.

The crisis could have severe economic consequences. Soaring prices are exposing the risk of power outages this winter, according to Goldman Sachs Group Inc. Blackouts would likely send energy prices even higher, compounding concerns about inflation and adding to the rising costs businesses are already shouldering for raw materials.

CF has so far taken the most drastic move of companies operating in the region, but others are warning of the likely blow-back.High energy prices are creating “inflationary pressure on every other cost” that will end up being passed on to customers, said Pascal Leroy, senior vice-president of core ingredients at Roquette Freres SA, a food processing company based in northern France. And France’s top sugar producer, Tereos, warned of surging natural gas prices raising production cost for the company “tremendously.”

…click on the above link to read the rest of the article…

Panic Hoarding Gasoline Begins As UK Plunges Towards “Winter Of Discontent”

Panic Hoarding Gasoline Begins As UK Plunges Towards “Winter Of Discontent”

One day after oil giant BP warned about rationing gasoline and diesel at UK service stations, Brits began to panic buy fuel as the government tried to calm fears.

Lines of cars and trucks are spilling over into the streets at service stations across the country. A BP spokesperson said Thursday that a truck driver shortage has resulted in its inability to transport fuel from refineries to its network of service stations. These words spooked the public, which could cause a more severe shortage due to the hoarding.

The scenes of long lines at gas stations bring back memories of the 1973 Opec Oil Crisis, the 2000 fuel shortage, and the virus pandemic disruptions amid fears the country is diving headfirst into a 1970s-style “winter of discontent” of shortages and socio-economic distress.

On Friday afternoon, Transport Secretary Grant Shapps told Brits on Sky News that there was no fuel shortage and for “everyone to carry on as normal.” His soothing words weren’t enough to stop the buying panic, which is expected to continue into the weekend.

Gasoline and diesel shortages will only stoke higher prices amid an expanding energy crisis that has resulted in another shortage: natural gas. This has caused power prices to erupt and disrupted chemical plants that halted fertilizer production, and has caused headaches for major food supply chains. Brits are also panic hoarding food.

The Daily Mail provides a list of issues that threatens a winter of discontent:

1. A shortage of natural gas causing a spike in gas bills for millions of Britons, along with the possibility of dozens of small energy firms going bust; 

2. However ministers say ‘there is question of the lights going out, of people being unable to heat their homes. There will be no three-day working week, or a throwback to the 1970s’; 

…click on the above link to read the rest of the article…

Crisis by design

Crisis by design

Believe it or not, British Prime Minister Boris Johnson has every right to stand before the nations of the world and lecture them on climate change.  Not that Johnson himself has done much to address the crisis (indeed, given that having children is the single biggest cause of climate change at this point, Johnson’s inability to keep his willy in his pants makes him an exemplar of much that is toxic in our culture).  But as the current political head of a country which has done more than most to pursue the bright green vision of a world without fossil fuels, he has every right to ask others to follow Britain’s lead.

They won’t do it, of course.  US President Biden has already restated American motorists’ God-given right to cheap gasoline.  Meanwhile, President Xi Jinping may be promising to cut other people’s access to coal-power, but China still consumes half of the world’s coal and shows no sign of curbing its own coal-fired growth.  Germany talks a good Energiewende, but it still depends upon fossil fuels for two-thirds of its electricity, and is not pledged to end coal-fired generation until 2038.

In fact, Britain appears to be the only developed state to swallow the Big Green Lie at face value:  The claim that it is entirely possible to operate a fossil fuel-based industrial economy without fossil fuels.  Starting with the smallest, and easiest to transform, sector of the economy – electricity generation – we were promised not only that a seamless transition was possible, but that it would be cheap and easy.  Indeed, it was precisely the promise that wind turbines and solar panels were getting cheaper which persuaded the Blair government to sign up to a policy to generate 20 percent of the UK’s electricity from renewable sources.

…click on the above link to read the rest of the article…

UK Tells People To Stop “Panic Buying” As “Winter Of Discontent” Fears Emerge

UK Tells People To Stop “Panic Buying” As “Winter Of Discontent” Fears Emerge

UK politicians are in utter panic as similarities to the 1970s-style “winter of discontent” of shortages and socio-economic distress could rear its ugly head in the coming months, according to Reuters.

A significant driver in what could very well be a hellacious winter for Brits is soaring natural gas and electricity prices that have already disrupted segments of the UK economy and sent shockwaves through energy markets, chemical producers, and the food industry, among others. Compound this all with labor shortages thanks to Brexit, and the dire situation may worsen.

Some Brits who remember the past worry a winter of discontent could be imminent. Many are facing extraordinary high power bills and sharp food inflation that are eating away at wages, along with shortages of goods at supermarkets.

The primary driver of this chaos is soaring natural gas prices due to declines in Russian flows to Europe, along with a drop in renewable power output. The soaring cost of natgas has pressured chemical firms that use the gas in production to limit or halt operations. One such industry is fertilizer that is a byproduct of natgas. From there, the decline of fertilizer has affected CO2 production, which heavily impacts food supply chains.

People are paying attention to the developments of the energy crisis and its immediate ripple effect across the economy and are taking no chances of being left without food. Many are panic buying food as government officials try to calm everyone down, reassuring everyone the winter of discontent is not upon them.

“There is no need for people to go out and panic buy,” Small Business Minister Paul Scully told Times Radio.

…click on the above link to read the rest of the article…

The UK’s Green Gilt is Marketing Puff and a Pointless Distraction

The UK’s Green Gilt is Marketing Puff and a Pointless Distraction

The UK attracted a record £137 bln order book for its £10 bln Green Gilt. But what does the Green Gilt achieve? Its marketing puff. It may disguise how ill-considered and ultimately self-defeating the Government’s rush to looking green has been. No matter how well intentioned a Green Gilt is – its style over substance, papering over the cracks in a confused and contradictory long-term climate-change mitigation strategy.  

“Every decent con man knows a simple truth is more powerful than an elaborate lie..”

This morning: The UK attracted a record £137 bln order book for its £10 bln Green Gilt. But what does the Green Gilt achieve? Its marketing puff. It may disguise how ill-considered and ultimately self-defeating the Government’s rush to looking green has been. No matter how well intentioned a Green Gilt is – its style over substance, papering over the cracks in a confused and contradictory long-term climate-change mitigation strategy.  

It fills my heart with joy and makes me proud to be British that the UK Government just received £137 billion of orders for its debut Green Bond – a record historical amount for any UK bond or Green Bond. (US Readers… disinterested sarcasm alert.)

Investors were apparently tumbling over themselves to place orders, but I can’t say many will be surprised or disappointed when they got less than 7% of their order. The £10 bln Green Gilt due in 2033 (12 year) will pay a 0.875% and was priced to yield 0.8721%… which is a bit more than the comparable 11year bond was paying at the time….

The proceeds of the new Green Gilt will specifically be earmarked to support green projects including zero-emission transport and offshore wind projects. I don’t quite understand how the spending programme will actually work…

…click on the above link to read the rest of the article…

BP Prepares To Ration Gas At UK Service Stations Amid Supply Woes

BP Prepares To Ration Gas At UK Service Stations Amid Supply Woes

Compounding the ongoing UK energy crisis is BP plc, a multinational oil and gas company, which said it plans to restrict deliveries of gasoline and diesel across its network of service stations in the country amid a truck driver shortage, according to ITV.

ITV, citing a BP spokesperson, said a shortage of truck drivers is inhibiting the oil company’s ability to transport fuel from refineries to its network of service stations.

According to ITV, the disruption is expected to cause BP to announce fuel “restrictions” at service stations “very soon.” 

The spokesperson said a “handful” of service stations have already closed due to the lack of unleaded gasoline and diesel.

Last Thursday, BP’s Head of UK Retail, Hanna Hofer, spoke with the Cabinet Office about the diminishing supplies and said BP had two-thirds of fuel stock levels required for normal operations. She expects fuel stocks to stabilize and began rebuilding in October, but there could be a few weeks of disruptions at the pump.

The spokesperson added:

“These have been caused by delays in the supply chain, which has been impacted by industry-wide driver shortages across the UK and we are working hard to address this issue.”

A lack of truck drivers is due to several factors, including Brexit and the virus pandemic. Since Brexit, there are estimates that several thousand truck drivers from the EU are thought to have been lost.

This is more bad news for Brits, who are already experiencing hyperinflating natural gas and electricity prices, along with other disruptions caused by the energy crisis.

‘Revolutionary in a quiet way’: the rise of community gardens in the UK

Royal Horticultural Society sets up first Community Awards as community gardens become more common

Lucy Mitchell, a community project worker with the Golden Hill Community Garden, in Horfield, Bristol.
Lucy Mitchell, a community project worker with the Golden Hill community garden, in Horfield, Bristol. Photograph: Adrian Sherratt/The Guardian
“The first melon of the season always tastes amazing,” says Lucy Mitchell. “I don’t think anyone has ever taken one home – every year, we just cut them into as many slices as there are people in the garden and make sure everyone gets a melon moment.”

After almost a decade of being involved with the Golden Hill community garden in Horfield, Bristol, she never gets complacent about the significance of these simple things. “We remember ‘Big Jim’, the biggest sunflower who ever grew here, or the miracle sunflowers that grew in the gravel and we wait for the frogs to return to the pond. These things all layer into our story and we look forward to them.”

Community gardens are becoming ever more common across the UK, and at the end of September, the Royal Horticultural Society will announce the winners of its first Community Awards.

“Where groups like this existed, communities seemed to be more resilient when it came to a crisis [like Covid] because they had a pre-established network of volunteers and people already knew each other so they could easily offer support,” says Kay Clark, who heads up the RHS community gardening programme. “With wellbeing and nature connection becoming top priority during lockdown, we had this massive surge of interest in gardening and the community groups were there to help people learn how to garden, teach skills, share knowledge, plants, tools and all sorts as well as inspire people and cheer them up.”

Gardeners chatting at the Golden Hill community garden in Bristol
Gardeners chatting at the Golden Hill community garden in Bristol Photograph: Adrian Sherratt/Alamy

…click on the above link to read the rest of the article…

UK Power Suppliers Halt Adding New Customers As Energy Crisis Worsens

UK Power Suppliers Halt Adding New Customers As Energy Crisis Worsens

There’s a growing risk that a bankruptcy wave of power providers is nearing as several small firms stopped accepting new customers Tuesday amid a worsening energy crisis, according to Bloomberg.

Ampower, Green, Igloo, NEO, and Utilita Energy posted notices on their websites earlier today that they weren’t accepting new customers. This comes as several weaker rivals have already gone bankrupt as natural gas and power prices surge to record levels, leaving power suppliers who sold energy at lower prices underwater.

We noted Monday, out of the 55 or so power suppliers, only six to ten will be left standing after the smoke clears. So far, five have gone bust since the start of August, which coincides with surging wholesale costs of natural gas and electricity.

“A lot of the smaller ones are probably going to go,” said Niall Trimble, managing director of consultant Energy Contract Co. “If you were planning to buy gas for 50 pence and it’s 150 pence, that’s a hell of a blow to your finances.”

Bloomberg Intelligence’s Patricio Alvarez said low inventories in Europe ahead of the winter season are primarily the triggers for U.K.’s energy crisis. Here’s more:

Low gas inventories in Europe, ebbing pipeline imports and strong Asian demand driving liquefied natural gas (LNG) cargo diversions form a constructive backdrop for regional wholesale gas prices into heating season. Tapering domestic output, competitive global LNG markets and increased gas burn for power generation amid carbon-price volatility may keep balances tight in 2022 as a post-pandemic recovery unfolds. A mild winter could ease prices from record highs, while piped supplies could improve from higher Norway volume and the potential startup of Russia’s Nord Stream 2 by year-end.

…click on the above link to read the rest of the article…

The UK is racing towards a winter energy crisis

Gas prices are spiking and the energy markets are coming under increasing pressure. The combination may lead to a bleak winter
The UK is racing towards a winter energy crisis
GETTY IMAGES / BLOOMBERG
Winter is coming – and it looks like it’s going to be a rocky one. The price of natural gas in the UK has increased more than 420 per cent year on year. In mainland Europe, prices are tracking a similarly sharp trajectory. And a perfect combination of other factors – including environmental conditions and unpredictable accidents – is putting the industry under further strain.

These price fluctuations have a knock-on effect: the price of electricity – often generated from gas – is spiking, while household suppliers are hitting the wall as catastrophically high wholesale prices make their businesses uneconomical. Seven UK supply firms have gone out of business so far this year. Bills for end users are forecast to rise 20 per cent, according to Citigroup.

It all makes for grim reading – particularly as gas remains a key source in powering our homes and business. But we should get used to it. According to some experts, it’s just the first flashing warning light on the dashboard of a car heading headlong into a prolonged, painful crash.

Almost everything that could go wrong with the energy markets is currently going wrong – and there are few easy fixes. First, take the climate crisis: our fixation on low-cost fossil fuels has engendered a situation that makes us more susceptible to supply shocks as we try and wean ourselves off the thing that helped cause the problem in the first place. “We always had these geopolitical risks,” says Adi Imsirovic, a senior research fellow at the Oxford Institute for Energy Studies, and a former oil trader with 30 years’ experience. “Now we have climate change risks that are essentially a premium on the prices.”

…click on the above link to read the rest of the article…

“Quite Alarming” – UK Energy Crisis Sparks Fresh Chaos For Food Suppliers

“Quite Alarming” – UK Energy Crisis Sparks Fresh Chaos For Food Suppliers

Last week Fertilizer producer CF Industries Holdings Inc suspended operations at two UK plants because of soaring natural gas prices. As a result, these fertilizer plants that make carbon dioxide as a byproduct are in sudden shortages and are rippling through the UK food sector, according to Bloomberg.

The shortage of carbon dioxide has forced Online grocer Ocado Group Plc to halt all deliveries of frozen products to customers, and the meat industry warned slaughterhouse operations could “grind to a halt” in weeks.

The British Meat Processors Association warned carbon dioxide supplies could be exhausted by the end of the month, forcing slaughterhouses to close and result in a mass culling of animals.

Last Friday, Ocado halted deliveries of frozen food to customers because of the dry ice shortage.

“It’s quite alarming,” said Nick Allen, head of the meat association. “We’re talking between days and weeks from this really hitting hard, unless somewhere in the world — ideally here in Europe — there are supplies of this that can replace that amount of CO2 very quickly.”

The ripple effect continues as British Soft Drinks Association monitors the carbon dioxide situation as the industry could go flat.

Besides CF Industries, Norwegian fertilizer maker Yara said it would soon reduce ammonia output capacity by 40% because of record-high natural gas prices.

The broader impact could be soaring food and energy inflation across the UK, threatening the country’s post-pandemic economic recovery and financially strain consumers.

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

IEA Executive Director Fatih Birol delivered some unwelcoming news for commercial and residential natural gas buyers during an interview on Bloomberg TV Friday morning. He said European natural gas prices might push higher in the coming weeks as the heating season begins.

“We may still see gas prices a bit high for the next days and weeks to come,” Birol said in the interview. The “most important factor here will be in the short term — how the winter conditions will be.”

He said if the European winter season is “harsh.” This would suggest natgas prices may remain elevated and or even accelerate higher. So far, European gas prices have more than tripled this year.

Birol said, “very strong demand” due to the economic rebound has been a driver in higher natgas prices. There’s also the issue of declining flows from Russia, which have failed to replenish European stockpiles ahead of the heating season.

Natural gas supplies are below average for this time of year.

For Central Europe, maximum average temperatures have already slipped from around 80F in mid-August to about 70F. By the end of the month, maximum high temps are slated to drop between the 55F to 60F range. This means the heating season is beginning.

Another way to quantify increasing heating demand in Central Europe is through heating degree days, which measure the energy needed to heat a building. The index rises when daily average temperatures are below 65F.

Uncertainty looms over the replenishment of European natgas supplies as colder weather has arrived. Russia’s Nord Stream 2 pipeline to Germany could be Europe’s saving grace, but regulators could take months to certify before taking shipments.

…click on the above link to read the rest of the article…

UK Supply Chain Crisis

UK Supply Chain Crisis

Fire At UK-France Subsea Power Cable Could Trigger Winter Blackouts

Fire At UK-France Subsea Power Cable Could Trigger Winter Blackouts

A fire in a subsea cable has dramatically reduced power imports from France until March, U.K.’s National Grid Plc said, deepening the energy crisis that threatens winter blackouts for millions.

The timing couldn’t be worse. Before the fire, the U.K. was already experiencing a five-year low in spare winter capacity. Compound this with gas shortages and the lack of renewable energy sources, sending power prices on a record-breaking run. The country may experience grid chaos in the coming months.

“If we don’t start to remedy the situation, we are going to be facing blackouts this winter,” Catherine Newman, chief executive officer of Limejump Ltd., a unit of Royal Dutch Shell Plc, told Bloomberg on Thursday. “If things don’t start to reverse soon, we will see the industry getting turned off across the board.”

“If anything goes wrong, we might not have anything left in the back pocket,” said Tom Edwards, a consultant at Cornwall Insight Ltd., an adviser to the government and utilities. “If a nuke trips offline or something else big, that could cause issues because we might not have anything to replace it.”

Britain receives power via six subsea cables, and two of them are connected to France’s power grids of more than 56 nuclear power plants.

The cable’s total capacity will be shut off until March 2022. The shortage is expected to exacerbate power price volatility when peak demand is seen in the winter months.

“The outage is going to lift the potential for price volatility as long as its offline,” said Glenn Rickson, head of power analysis at S&P Global Platts. 

The compounding energy crunch is fueling concerns about inflation when the economy is still recovering from the pandemic.

…click on the above link to read the rest of the article…

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